The COVID-19 pandemic has accelerated the shift to remote work as the digital world is finally at a stage where it can support technology like virtual meetings. The digital revolution that enabled telework and the upcoming roll out of 5G will also enable telerobotics and augmented/virtual reality which will increase the amount of automation globally. The increase in virtual and telepresence also has the potential to provide alternative development paths for emerging markets, away from a manufacturing-led growth model (like China) more to a service-led growth model (like India).
These are just some of the findings of a new report published by Citi, A New World of Remote Work. The report, the fifth edition in the Citi GPS Technology at Work series, looks at how COVID 19 fast-forwarded existing trends and quantifies the possible impact of these trends on the future of work.
“The COVID-19 pandemic has demonstrated that remote work is possible. We examined 483 occupations and found that 113 of them can be performed remotely,” said Carl Benedikt Frey, Oxford Martin Citi Fellow, and Director of the Future of Work Programme at the Oxford Martin School. “Importantly though, those 113 occupations employ 52% of the U.S. workforce.”
However, the shift to remote work has also highlighted some inequalities in the workforce. Jobs that are able to be done remotely tend to be higher paying jobs and those that require physical presence tend to be lower paying/lower education jobs. This means that the lockdowns resulting from the pandemic have disproportionately affected incomes for those in lower-paying jobs which couldn’t be switched to remote work. This mirrors research on skilled-biased technological change which showed the technology advances of the 20th century favored skilled workers and is reflected in their higher wages.
One of the takeaways from the analysis is that innovation is needed to increase resilience to further shocks and avoid the societal disruptions that lockdowns have caused. A skilled workforce, digital infrastructure, and the removal of policies and regulation that hinder the move to digital are needed.
“The pandemic brought about the biggest work experiment in history, accelerated digital trends, and has opened up new habits, possibilities, and thinking,” suggested Robert Garlick, Head of EMEA Equity Research, adding that “the answer is likely for employers to give their talent the choice. Let them experiment and innovate. A combination of choice and technological process means we are unlikely to go back to norms at the start of this year/decade.”
If telework is the new normal, what are the implications to sectors, corporations, and society?
“Trends that we see accelerating include education technology, where the pandemic is likely to shift attitudes towards increasing spend – as schools look to lower overall costs and drive productivity,” said Thomas Singlehurst, Head of European Media Research.
The value of connectivity has increased during the pandemic and network infrastructure has enabled functions such as eHealth and Big Data & Monitoring, according to Georgios Ierodiaconou, Director European Telecoms Research.
The rapid shift to work from home has been a catalyst for next-generation software focused on productivity and collaboration, observed Walter H Pritchard, Managing Director US Software Research.
Increasing remote work is bound to affect both the real estate office market and cities in general. Although some companies are talking about reducing their office footprint, Aaron Guy, Head of EMEA REITs Research, noted that “cities are flexible and despite manufacturing moving out of cities for decades, cities continue to gain in population.”
Citi sees cities as the catalyst for innovation and believes they will continue to survive and adapt.
Business travel is less controversial as new technology like virtual meetings will likely reduce the amount of face-to-face meetings. Mark Manduca, Associate Director of EMEA Research and Europe Airlines Analyst, forecast a 25% reduction in corporate travel going forward versus 2019 level and noted a 1% reduction in corporate travel volumes could have a 10% impact on airlines’ revenues.
Finally, but importantly, less cars commuting during peak hours and less office buildings requiring electricity means less CO2 in the air.
“Using a scenario analysis, if 52% of U.S. workers worked just 1 day from home, annual CO2 reductions could be 20MT annually, a 2.5% decrease and the equivalent of taking 4.3 million cars off the road annually,” explained Elizabeth Curmi, Director Sustainable Finance, Citi Global Insights.
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